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What are some factors that affect the price of NYMEX oil?

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Quick Answer

Some factors that affect the price of NYMEX oil include higher employment levels, expanded global development and refining capacity, as well as the value of the U.S. dollar. Because the price of oil is denominated globally in U.S. dollars, its value relative to other currencies influences price.

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Full Answer

NYMEX is a Designated Contract Market, an exchange that lists futures or options and allows access to all types of traders including retail customers. While NYMEX oil trades at future prices, typically three months in the future, the present price is a factor. Low prices indicate abundant oil supplies and encourage consumption. As supplies dwindle, oil prices increase. Factors to consider for increased consumption are summer driving, cold winters, expanded construction in developing countries and more refinery runs. Greater industrial output is another factor that increases consumption. Look at prices for other commodities, such as copper, cotton and rubber, for increases in industrial capacity. Other factors that disrupt supply are crises in oil output nations, financial strife in bond and stock markets, and tanker capacity

Oil prices are quoted in U.S. dollars across the globe. The stronger the value of the dollar in relation to other currencies, the fewer dollars needed to buy a barrel of oil. Currency exchange rates are other factors that influence the price of NYMEX oil.

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